Professional Documents
Culture Documents
This discipline covers the concepts and practices that guide and align Human Resource Management philosophy, tactical planning and practice with the strategic and long term goals of the organization, with a particular focus on human capital. It deals with the macro-concerns of the organization regarding structure, quality, culture, values, commitment, matching resources to future needs and other longer term people issues. Strategic HRM gives direction on how to build the foundation for strategic advantage by creating an effective organizational structure and design, culture, employee value proposition, systems thinking, an appropriate communication strategy and preparing an organization for a changing landscape, which includes downturns and mergers & acquisitions. Strategic HRM emphasizes organizational codes of ethics, managing the societal impact of business decisions, philanthropy and the role of the human resource professional in improving the quality of life of employees, their families and the community at large.
strategy
If one does not know to which port one is sailing, no wind is favorable (Seneca)
"Strategy is the direction and scope of an organization over the longterm: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". In other words, strategy is about: * Where is the business trying to get to in the long-term (direction) * Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope) * How can the business perform better than the competition in those markets? (advantage)? * What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)? * What external, environmental factors affect the businesses' ability to compete? (environment)? * What are the values and expectations of those who have power in and around the business? (stakeholders)
Strategy: formulation
Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps. a) Setting Organizations objectives - The key component of any strategy statement is to set the long-term objectives of the organization. It is known that strategy is generally a medium for realization of organizational objectives. b) Evaluating the Organizational Environment - The next step is to evaluate the general economic and industrial environment in which the organization operates. This includes a review of the organizations competitive position. It is essential to conduct a qualitative and quantitative review of an organizations existing product line.
Strategy formulation
c) Setting Quantitative Targets - In this step, an organization must practically fix the quantitative target values for some of the organizational objectives. The idea behind this is to compare with long term customers, so as to evaluate the contribution that might be made by various product zones or operating departments. d) Aiming in context with the divisional plans - In this step, the contributions made by each department or division or product category within the organization is identified and accordingly strategic planning is done for each sub-unit. This requires a careful analysis of macroeconomic trends. e) Performance Analysis - Performance analysis includes discovering and analyzing the gap between the planned or desired performance. A critical evaluation of the organizations past performance, present condition and the desired future conditions must be done by the organization. f) Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of action is actually chosen after considering organizational goals, organizational strengths, potential and limitations as well as the external opportunities.
Strategic management
Strategic management can be used to determine mission, vision, values, goals, objectives, roles and responsibilities, timelines, etc. Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives. An integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. Strategic management includes understanding the strategic position of an organization, making strategic choices for the future and managing strategy in action. Strategic management is defined as the process by which managers of the firm analyze the internal and external environments for the purpose of formulating strategies and allocating resources to develop a competitive advantage in an industry that allows for the successful achievement of organizational goals.
strategic management process means defining the organizations strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises its competitors; and fixes goals to meet all the present and future competitors and then reassesses each strategy.
in people Costs
Out-of-pocket Opportunity
Human assets become competitive advantage Required skills become less manual, more knowledge-based Appropriate, integrated, strategy-consistent approach is needed
Managers need investment orientation toward people Attitude Toward Risk Investment in human resources inherently riskier Human assets never absolutely owned Nature of Skills Needed by Employees The more marketable employee skills, the riskier the firms investment in skill development Utilitarian (Bottom Line) Mentality Attempt made to quantify employee worth through cost-benefit analysis Soft benefits of HR programs difficult to objectively quantify Availability of Outsourcing Given availability of cost-effective outsourcing, investments in HR should produce highest returns & sustainable competitive advantages.
HR VALUE CHAIN
The outcomes from such a set up are soft in nature as they include high congruence, commitment, competencies etc.
The achievement of the crucial HR outcomes has got an impact on long term consequences, increased productivity, organizational effectiveness which will in turn influence shareholder interests and situational factors hence making it a cycle. It is thus important to note that the Harvard model is premised on the belief that it is the organizations human resources that give competitive advantage through treating them as assets and not costs.
Tutorial model
The model by John Storey is based on four aspects. Beliefs and Assumptions The model is premised on the notion that HRM is based on a set of beliefs and assumptions, which makes it a distinctive approach. Fundamentally it is believed that it is the human resource among all the other factors of production, which gives the difference. Successful organizations are distinguished from the rest by the capabilities and commitment of the people who work for them. It is therefore imperative that the human resource ought to be treated with great care and nurtured as valuable assets. Finally it is believed that the employment relationship is based on commitment and not compliance.
Tutorial model
Strategic Qualities HRM is further distinguished by the fact that it is strategic in nature and therefore requires the attention of senior management and top executives. The above-mentioned assumption stems from the 1st belief that the human resource is the most important source of competitive advantage. HR Policies are too important to be a product of prescribed best professional practice only. In fact they must be sensitive to the demands of the competitive business environment, business strategy and the HR strategy. Role of Line Managers Line managers have a very important role to play in people management. It is clear from the HRM philosophy that people management is too important to be left to operational personnel specialists. Fundamentally, the importance of line managers is seen through the strong link that exists between them and their respective subordinates or employees.
Tutorial model
Key Levers
There is a strong belief that culture management is important than managing Procedures and systems. This is primarily important because culture management brings consensus on overall organizational values, beliefs and assumptions. Culture management is also believed to be essential in flexibility and commitment. Integrated action on all HRM policies Restructuring and job redesign to allow developed responsibility and empowerment.
Barriers to shrm
Strategic contribution
Business knowledge Personal credibility HR delivery HR technology The barriers that can be met by HR strategists when attempting to implement strategic initiatives often result from a failure to understand the strategic needs of the business, with the result that HR strategic initiatives are seen as irrelevant, even counter-productive. Implementation will also be difficult if one initiative is taken in isolation without considering its implications on other areas of HR practice or trying to ensure that a coherent, holistic approach is adopted. It will be very hard to implement anything if the practical problems of getting the initiative accepted by all concerned, including, importantly, top management have not been dealt with. Inability to achieve ownership among line managers, or to develop the skills they require to play their part in implementation, will be major obstacles.